Technology Case Study II
Industry
High-Tech: Network Server Manufacturer
Company Profile
$1.1 Billion in sales; 3000 employees worldwide; publicly traded
Background
In 2001, the client was notified that it would be audited by state taxing authorities related to its independent contractor engagement practices.
Challenge
The client did not have any protocols in place to properly classify their contingent workforce and was told by authorities to expect fines in excess of $1 million. The client had minimal independent contractor control points in place and was not in the habit of issuing purchase orders for independent contractors and consultants. Internally, the client had a history of rogue spending by managers who ignored loosely enforced company policies. In addition, there were no streamlined communication frameworks or processes in place for department coordination of invoices or support of existing service agreements.
ICon Outcomes
By engaging ICon, the client greatly minimizes its exposure to fines because the taxing authorities acknowledge the client's efforts to become compliant. In short order ICon has established independent contractor management control points to ensure federal and state compliance throughout the organization, providing comprehensive visibility to the company's contractor workforce. This includes headcount, spend ratios, and contractor utilization by cost center, business unit, location, department and manager on a local, regional or national basis.
ICon also significantly reduces the administrative tasks and burdens on the purchasing departments by receiving and processing payment for independent contractors and mitigated additional risk by providing a low cost payroll service for non-sourced project workers and contractors.
ICon Solution
ICon provided the client with a dedicated website and support services to facilitate its on-demand nationwide solutions, including:
- Independent Contractor Compliance
- Payroll and Benefits
- Audit Support
- Independent Contractor Consolidated Billing
- Background Checks
ICon designed a contingent workforce practice that educated management to government guidelines and defined a comprehensive compliance program that included policies for internal business rules. In addition, ICon created an automated process to authorize, verify and consolidate independent contractor billing services, including an interface with Oracle systems.
Results
- ICon significantly reduced the administrative tasks and burdens on the HR, Accounts Payable and Procurement departments.
- ICon eliminated the client's current exposure to audits.
- ICon reduced additional exposure by providing a low-cost payroll service for non-sourced project workers/contractors.
- ICon provides comprehensive background checks.
- ICon delivered a scalable suite of services for a contingent workforce that has doubled in size in less than two years.
- ICon deployed its suite of services in a two week period - quickly ensuring compliance.
- ICon customized services to assist users in completing the on-boarding process themselves, eliminating HR and Procurement intervention.
- ICon became the single point of contact for independent contractors and contracted workers.
Estimated Risk Avoidance
For the years 2001 through 2004, the ICon suite of services has helped the company avoid $6 million in potential liability.
ICon has added much-needed control and accountability to our processes. We faced an audit, but because of ICon's implementation, it was waived. We asked for customized, consolidated billing and got it without a hitch – even a seamless integration to our Oracle system worked the first time.
- VP, Human Resources